Over-taxing the very firms that create jobs and opportunity risks killing new growth before it’s had a chance to start. The budget is a chance to show real commitment to innovation by creating an environment where it can truly flourish.

Ifty Nasir, Founder and CEO of Vestd, has shared five key areas the Chancellor could take action to boost economic growth.

Earlier access to benefits and rewards

Employee share schemes can be powerful tools for motivation, retention and productivity.

“Giving staff ‘skin in the game’ helps them feel part of a company’s success, and a key motivator for staff to stick around for the long-term,” said Ifty.

Despite their benefits, the time restrictions on some share schemes means employees often have to wait much longer than expected to reap the rewards.

“Plans like the Share Incentive Plan (SIP) have a mandatory holding period of five years. That can put off employees who would otherwise take part.

“We recently co-signed a letter to the Chancellor alongside other leading brands including Aviva, BP and Vodafone, calling for a reduction in the mandatory holding period to be reduced from five years to two.

“Reducing the time frame would make the scheme more attractive, and directly targets government priorities: boosting retail share ownership in the UK while strengthening the connection between working people and the companies they help to grow.”

Funding for AI upskilling and reskilling

The World Economic Forum estimates that almost 60% of the global workforce will need upskilling or reskilling by 2030 – and the UK is far from immune to that change.

“In the same way that the internet and personal computers changed the way we work, the rapid adoption of AI means jobs will look very different in a few years’ time compared to now,” said Ifty.

“For a future-thinking government, now is the time to get British workers and businesses prepared for the change. While funding for schools and young people is important, older employees and those re-entering the workforce shouldn’t be left out.”

Make financial literacy a priority

Recent speculation suggests the cash ISA allowance might be cut to encourage more people to invest rather than using savings accounts. But the Treasury Select Committee warns that such a change is unlikely to incentivise people to invest in shares.

“Cutting the cash ISA limit doesn’t encourage people to invest in shares – if anything, it limits their options as savers,” Ifty said.

“While stocks & shares ISAs can give people a better return than using their regular savings account – and provide an investment boost for businesses - there’s still an element of risk involved.

“Instead, the government should look to boost financial literacy. Giving savers the confidence and knowledge to take control of their finances helps them to manage their money sensibly. Both the saver and economy still benefit, but individuals have much more control over their money.”

Widening salary sacrifice options

Workplace pensions and salary sacrifice schemes have become valuable, tax-efficient tools for saving towards retirement. But there are growing concerns that new restrictions could be imposed.

Ifty said: “Capping salary sacrifice options might be a short-term fix, but the risks are likely to outweigh the benefits.

“For employers, National Insurance costs per employee would rise, and workers might be discouraged from saving for their future.

“A smarter option could be to encourage more businesses to offer employee share schemes, which channel more investment back into the economy while offering a tax-efficient way to reward staff.”

Expanding eligibility of share schemes

While share schemes are generally accessible for small and medium businesses, current regulations hugely restrict the eligibility of bigger businesses.

For example, enterprise management incentive (EMI) schemes can only be opened for businesses with less than 250 employees and assets of less than £30 million. So, as businesses grow, they can lose access to these schemes.

“Raising the cap on EMI and similar schemes would align with the government’s pro-growth agenda,” said Ifty. “It’s a simple, effective way to support scaling businesses and reward innovation.”

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